A year-long moratorium on caleches has been cancelled, Montreal Mayor Denis Coderre has announced.

The mayor made the announcement following an injunction by a judge Wednesday, who ruled the city of Montreal overstepped its powers, and ordered the immediate return of horses and caleches to the streets of Montreal.

Last week the city of Montreal made a snap decision to ban caleches, giving owners and horse drivers less than one week to return their permits.

After the temporary injunction, the case was set to return to court on June 3, but Coderre said he will cancel the moratorium, so drivers would not have to request a permanent injunction.

"I will comply with what the judge said, but there will be a new policy for the horses," said Coderre.

Caleche owners were pleased with the news.

"This was a crazy week for us to live and it was so discouraging and I'm not too ashamed to say that we cried this week," said caleche owner Luc Desparois. "We felt so bad. This was very rough for us. It's not only our work, it's our living, our horse, our way of life."

Coderre first announced he would revoke 24 permits last week, saying city would use the year-long moratorium to create new guidelines for the horse-drawn carriages.

On Wednesday, Coderre said the city would still proceed with new regulations and study the horses, their stables and public safety. He added the city would keep a close eye on the drivers and the horses over the summer months and that officials wouldn't hesitate to give out fines.

 They better comply though, because there will be some tickets attached to it, because I want to make sure we are living in a safe area," he said.

On Wednesday the judge in the case ruled in favour of the caleche drivers, saying the city had acted improperly.

"We are very happy with the decision made by Judge Casgrain," said lawyer Audi Gozlan.

"We were expecting solid arguments, but their arguments were 'maybe it's not best for the horses.'"

The lawyer for caleche drivers said it was obvious the city was acting quickly, when there was no need to rush into a decision.

"The city of Montreal decided unilaterally to remove their permits, and that was not realistic."

"There was no notification, there were no meetings, there wasn't a way to appeal the decision, and that's not right."

Caleche drivers leaving the courtroom Wednesday said they were immediately heading to the stables, despite the threat of rain, and would resume plying their trade.

With files from The Canadian Press